[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                AMTRAK'S FISCAL YEAR 2008 STRATEGIC PLAN

=======================================================================

                                (110-51)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

             RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 12, 2007

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

                                   ____

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_____________________________________________________________________________
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia    JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon             DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois          THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of   HOWARD COBLE, North Carolina
Columbia                             JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York             WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida               VERNON J. EHLERS, Michigan
BOB FILNER, California               STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas         RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi             FRANK A. LoBIONDO, New Jersey
ELIJAH E. CUMMINGS, Maryland         JERRY MORAN, Kansas
ELLEN O. TAUSCHER, California        GARY G. MILLER, California
LEONARD L. BOSWELL, Iowa             ROBIN HAYES, North Carolina
TIM HOLDEN, Pennsylvania             HENRY E. BROWN, Jr., South 
BRIAN BAIRD, Washington              Carolina
RICK LARSEN, Washington              TIMOTHY V. JOHNSON, Illinois
MICHAEL E. CAPUANO, Massachusetts    TODD RUSSELL PLATTS, Pennsylvania
JULIA CARSON, Indiana                SAM GRAVES, Missouri
TIMOTHY H. BISHOP, New York          BILL SHUSTER, Pennsylvania
MICHAEL H. MICHAUD, Maine            JOHN BOOZMAN, Arkansas
BRIAN HIGGINS, New York              SHELLEY MOORE CAPITO, West 
RUSS CARNAHAN, Missouri              Virginia
JOHN T. SALAZAR, Colorado            JIM GERLACH, Pennsylvania
GRACE F. NAPOLITANO, California      MARIO DIAZ-BALART, Florida
DANIEL LIPINSKI, Illinois            CHARLES W. DENT, Pennsylvania
DORIS O. MATSUI, California          TED POE, Texas
NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New 
BRUCE L. BRALEY, Iowa                York
JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr., 
HEATH SHULER, North Carolina         Louisiana
MICHAEL A. ACURI, New York           JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
JOHN J. HALL, New York               MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
STEVE COHEN, Tennessee
JERRY McNERNEY, California
VACANCY

                                  (ii)

?

     SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                   CORRINE BROWN, Florida Chairwoman

JERROLD NADLER, New York             BILL SHUSTER, Pennylvania
LEONARD L. BOSWELL, Iowa             THOMAS E. PETRI, Wisconsin
JULIA CARSON, Indiana                WAYNE T. GILCHREST, Maryland
GRACE F. NAPOLITANO, California      STEVEN C. LaTOURETTE, Ohio
NICK LAMPSON, Texas                  JERRY MORAN, Kansas
ZACHARY T. SPACE, Ohio               GARY G. MILLER, California
BRUCE L. BRALEY, Iowa                HENRY E. BROWN, Jr., South 
TIMOTHY J. WALZ, Minnesota           Carolina
NICK J. RAHALL II, West Virginia     TIMOTHY V. JOHNSON, Illinois
PETER A. DeFAZIO, Oregon             TODD RUSSELL PLATTS, Pennsylvania
JERRY F. COSTELLO, Illinois          SAM GRAVES, Missouri
EDDIE BERNICE JOHNSON, Texas         JIM GERLACH, Pennsylvania
ELIJAH E. CUMMINGS, Maryland         MARIO DIAZ-BALART, Florida
MICHAEL H. MICHAUD, Maine            LYNN A. WESTMORELND, Georgia
DANIEL LIPINSKI, Illinois            JOHN L. MICA, Florida
JAMES L. OBERSTAR, Minnesota           (ex officio)
  (ex officio)

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Kummant, Alexander, President and Chief Executive Officer, Amtrak     3
Laney, David, Chairman, Amtrak Board of Directors................     3

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Brown, Hon. Corrine, of Florida..................................    31
Costello, Hon. Jerry F., of Illinois.............................    35
Cummings, Hon. Elijah E., of Maryland............................    37
Mica, Hon. John L., of Florida...................................    43
Oberstar, Hon. James L., of Minnesota............................    47

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Kummant, Alexander...............................................    51
Laney, David M...................................................    70

                       SUBMISSIONS FOR THE RECORD

Kummant, Alexander, President and Chief Executive Officer, 
  Amtrak, response to questions from the Subcommittee............    55
Laney, David, Chairman, Amtrak Board of Directors, response to 
  questions from the Subcommittee................................    73

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                      AMTRAK STRATEGIC INITIATIVES

                              ----------                              


                         Tuesday, June 12, 2007

                  House of Representatives,
    Committee on Transportation and Infrastructure,
       Subcommittee on Railroads, Pipelines, and Hazardous 
                                                 Materials,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:05 p.m., in 
Room 2167, Rayburn House Office Building, Hon. Corrine Brown 
[chairman of the Subcommittee] Presiding.
    Ms. Brown of Florida. Will the Subcommittee on Railroads, 
Pipelines and Hazardous Materials come to order.
    The Subcommittee is meeting today to hear testimony on 
Amtrak's Strategic Initiatives. Let me start by expressing my 
disappointment that the Board has not approved the Amtrak 
fiscal year 2008 strategic plan. I do not understand why Amtrak 
has not followed my newest request to have this plan ready. We 
were told in April that it was going to be approved in May, and 
we were told a few weeks ago that it was going to be approved 
prior to this hearing. We are now 8 months into the fiscal year 
2007. If the Board drags this out any longer, there will be no 
point in approving the plan.
    You have to start setting the stage for the initiatives in 
2007, and we want to see them succeed in 2008. At the rate that 
we are going, we will be in 2008 before we ever see a final 
plan.
    I did, however, review an earlier draft, and there is good 
news for Amtrak. Amtrak is projected to deliver the best 
ridership numbers and revenues in history with the projection 
of 25.3 million trips and $1.5 billion in revenues. Ridership 
in the first quarter of 2007 increased 7 percent over last year 
where ticket revenues were up 14 percent. Accelerated ridership 
alone was up 20 percent, and with the ever-increasing price of 
gas, ridership can only increase.
    I do not think there is a doubt that Amtrak has made 
significant improvements in the system over the last several 
years and has an ambitious agenda for future improvement, but 
Amtrak must also address some challenges before it can reach 
its full potential. It must improve its on-time performance on 
long-distance routes, replace aging rolling stock and 
infrastructure, improve safety and security, and resolve the 
longstanding disputes between management and labor.
    It is particularly important that Amtrak reach a labor 
agreement that is fair. Most of the Amtrak workforce has gone 
without a renewable contract for over 7 years. You cannot reach 
your ambitious goal of the company with employees who feel that 
they have been treated unfairly. The freights have made 
significant progress with their contracts, and I hope this 
inspires Amtrak to do the same.
    I look forward to hearing from Mr. Laney and Mr. Kummant 
today about these issues.
    Before I yield to Mr. Shuster, I ask that Members be given 
14 days to revise and extend their remarks and to permit the 
submission of additional statements and material by Members and 
witnesses. Without objection, so ordered.
    I yield to Mr. Shuster for his opening statement.
    Mr. Shuster. I thank the Chairwoman for yielding and for 
holding the hearing today.
    It seems that Amtrak has always been a contentious issue 
since, I guess, it was formed in the 1970s. Arguments over 
funding levels, corporate mission, corporate structure, 
allegations of wasteful spending have always been out there, 
but there is no argument, I think, that this Nation needs a 
safer, faster, more efficient passenger rail system than we 
have today.
    The Acela, as Mr. Mica likes to point out, only averages 82 
miles an hour. Wow. The intercity trains cannot even compete 
with the intercity bus service that we have in the country 
today, so Amtrak needs to be better managed, to manage better 
its resources than it has.
    I read through your plan that you put in place. It looks 
like a good plan, but historically as I look back through at 
Amtrak, it always has a good plan. It just does not seem to 
work out the way it should, and that is imperative that we do 
that.
    I know that Amtrak has brought in new management. I would 
like to welcome the new President and CEO--not new anymore--Mr. 
Kummant, who has been onboard now for several months or going 
on almost a year, I believe it is.
    I also welcome Chairman Laney for being here before us.
    I know you have also brought in a new CFO and a new general 
counsel, so we are looking forward to that management team 
doing good things.
    We still have a long way to go, but it appears that we are 
hopefully beginning to see some progress even on the long-
distance trains. The legacy of the 1950s was the interstate 
highway system, and I hope that our legacy in this new century 
will be a fast, efficient, high-speed rail system.
    It was about several months ago, maybe a year ago now--I 
think it was only several months ago--that we just passed in 
America the population threshold from 200 million to 300 
million people, and it took 65 years. I was reading a newspaper 
and saw the projections. We are going to go to 400 million in 
just 35 years, and when you look at the math and look as the 
population grows across America, the density of the population 
in the corridors that Amtrak serves is going to remain dense, 
and so it is for the future extremely important that we have an 
efficient passenger rail system. It is going to be something 
that future generations are going to rely on.
    So I am looking forward to hearing from you today, and I am 
looking forward to working with you as we try to improve Amtrak 
and improve the transportation system in this country.
    I yield back.
    Ms. Brown of Florida. Thank you.
    Ms. Brown of Florida. I would like to welcome our witnesses 
today at the hearing. Our first witness is David Laney, who is 
the Chairman of Amtrak's Board of Directors.
    Our second witness is Mr. Alexander Kummant, who is the 
President and Chief Executive Officer of Amtrak.
    Let me remind the witnesses that under our Committee rules, 
they must limit their oral statements to 5 minutes but their 
entire statements will appear in the record. We will also allow 
the entire panel to testify before questions to the witnesses.

STATEMENTS OF DAVID LANEY, CHAIRMAN, AMTRAK BOARD OF DIRECTORS; 
 AND ALEXANDER KUMMANT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
                             AMTRAK

    Ms. Brown of Florida. I now recognize Mr. Laney for his 
testimony.
    Mr. Laney. Madam Chairwoman, thank you.
    Mr. Shuster, I appreciate your comments.
    I appreciate the----
    Ms. Brown of Florida. Excuse me. Would you pull that mike--
yes, sir.
    Mr. Laney. Thank you for the invitation to appear before 
the Subcommittee today. I am glad to be back. I am glad to see 
you again, Madam Chairman. We are very glad that Congress is 
turning to Amtrak's reauthorization and hopeful that there will 
be a very constructive outcome. I will make my stated remarks 
very short, and you can use my written statement for reference 
and for questions if you would like.
    As you know, the last time Amtrak had an authorization was 
10 years ago, and I believe it is now in everyone's interest 
that Congress has this discussion and, ultimately, adopts a 
reauthorization that provides a clearer direction for Amtrak 
and its role in shaping the future passenger rail in this 
country.
    It is worth reminding you that the talent and experience 
housed in Amtrak represent virtually all of the passenger rail 
expertise remaining in this country today. I believe that 
expertise is worth protecting and worth growing, but I know 
also that it will not survive unless we at Amtrak successfully 
continue to rebuild Amtrak's credibility with Congress and the 
administration, with the American public, and in the commercial 
marketplace in which we operate.
    That is our challenge. And afforded even the bare minimum 
of necessary operating support which we received during the 
last years, we are, I think, very successfully tackling that 
challenge; not as fast as I would like, but faster than I 
expected. We are nowhere near anything resembling what I would 
consider an end zone. Still, the progress is significant and 
tangible, thanks largely to the remarkable expertise and almost 
inconceivably steady commitment to Amtrak by its workforce.
    There are a number of challenges, Madam Chairwoman, as you 
mentioned, and I will highlight only a few. But one of the 
principal challenges is on-time performance, particularly of 
our long-distance and corridor operations on host or freight 
railroads. I would add, in response to your comment earlier 
about our tardiness in terms of the strategic plan, that 
apparently on-time performance has also affected the Board. My 
apologies. We will have a plan to you shortly, and I am glad 
you had a chance to see a draft.
    We also have a challenge with respect to our equipment. We 
need to replace a very old, and, some people might say, 
antiquated and deteriorating equipment fleet. We continue to 
have the challenge of the rationalization of our long-distance 
routes, and we need to rebuild relationships with States, 
particularly as we focus our energies on State corridors for 
the future. Reauthorization is a critical need, and in that 
reauthorization, we sincerely hope that there is a Federal-
State match without which there would not be a very robust 
future for passenger rail in the near term.
    You mentioned, Madam Chairwoman, our labor contracts. We 
are very sincerely and very actively trying to move forward, 
and there are at least some indications of positive movement 
with respect to a resolution on a number of different fronts in 
that regard.
    Passenger security, on a different note, remains front and 
center for all of us. Those are challenges, but we have a 
number of remarkable achievements as well.
    We have reduced Federal operating support consistently. Our 
revenue in ridership growth, as you mentioned, Madam 
Chairwoman, is extraordinary. We have on-time performance 
levels, really for the first time, in its history of the Acela, 
approaching 90 percent. And I think we will be targeting 90 
percent as a minimum going forward.
    With respect to the reduction of Amtrak's debt, we reduced 
it by over $500 million over the last 4 years, and with respect 
to the success and the growth of our State corridors, I will 
refer only to the States of California, Washington, Illinois, 
Wisconsin, the Keystone Corridor in Pennsylvania, and the 
continued growth on the Northeast Corridor.
    The catalog of these positive results could continue, and 
there are a few more mentioned in my written statement. But let 
me close with a perspective on our employees, on our management 
team, on the working support we have had from the Department of 
Transportation, and now Secretary Peters, the Federal Railroad 
Administration, and Joe Boardman who is the head of that 
agency. All of these, I think, are in excellent shape, and that 
is at least some room for comfort that we will stay the course 
going forward.
    Finally, I believe you have a very independent, talented 
and proactive Board which continues to make a difference.
    I thank you for the invitation again, Madam Chairman, to be 
here today, and now I would like to answer any questions or to 
defer to our President and Chief Executive Officer, Alex 
Kummant.
    Ms. Brown of Florida. Mr. Kummant.
    Mr. Kummant. Thank you, Madam Chairwoman and Congressman 
Shuster. I will also try to keep my comments brief and not 
cover too much of the same ground.
    Again, it is a pleasure for us to be here and to engage in 
a very important topic here of the overall strategic future for 
Amtrak.
    First, on performance and key indicators, for another 
year--as has been mentioned in a couple of comments here 
already--Amtrak will set new ridership and revenue records. 
There are a number of contributing factors for this that I 
think we all understand quite well: the rising cost of 
gasoline; we have also added frequencies in a number of key 
States--California, Illinois, Pennsylvania--and there is 
clearly a shift in the ridership in terms of really looking for 
other modes.
    In the Northeast, the challenges of air travel combined 
with gas prices are clearly factors also as to why the Acela 
ridership has grown, as was referenced earlier, at 20 percent 
year over year. Another key ingredient which was referenced is 
the very strong, additional on-time performance of the Acela, 
reaching 88 percent, year to date, for this year with a target 
still of 90 percent.
    This improved on-time performance is a function of our 
investment in the Northeast Corridor infrastructure as well as 
sustained improvements in day-to-day operating efficiencies. 
Revenues for the year are 11 percent higher than last year for 
the total system. In addition, we continue to improve our 
safety numbers, and we are increasing our focus on passenger 
security.
    We have not assumed any new debt in 4 years, as Chairman 
Laney mentioned, and at the same time, we have also paid down, 
as was also referenced earlier. So, again, all of our 
indicators are moving in the right direction.
    Going forward, clearly we have challenges. All of this good 
news, again, does not mean that we do not have serious issues 
to tackle. It has become clear to me over the first months here 
at Amtrak that we are really at a crossroads. The company must 
do everything in its power today to position itself for the 
future. The decisions we make, the service we provide, the 
product we deliver today, will determine if Amtrak will truly 
play a key role as a provider of passenger rail service down 
the road.
    In order to realize the potential, we are developing a 
strategic plan, which we will have to you shortly, that focuses 
on continued companywide cost reduction initiatives that will 
help reduce Amtrak's reliance on Federal operating assistance. 
Increasing revenue is also, clearly, a key element of the plan 
and will hinge on Amtrak's ability to add frequencies and to 
improve revenue management.
    Our other key goals and objectives include containing cost 
growth, improving financial transparency, providing a safe 
environment for employees and passengers alike, improving the 
management of our human capital, and, finally, conserving 
natural resources. By increasing revenue and containing costs, 
it is our intent to reduce our dependence on Federal operating 
support over the next 5 years.
    Rail infrastructure continues to be a key issue, as you 
mentioned, of long-distance performance as well. America's rail 
infrastructure capacity is significantly stretched, 
particularly in those corridors that are most likely candidates 
for expansion. No matter what else is done, we will have to 
address capacity bottlenecks and shortfalls in many parts of 
our national rail system, most of which is not owned by Amtrak.
    Central to our strategy is to position ourselves to expand 
State corridor service where circumstances and resources 
permit. It is where the growth and ridership and revenue will 
lie in the years ahead. If you want to look at models of 
successful State programs, again as mentioned before, 
California, Washington and Illinois are great examples.
    Overall, our goal for our reauthorization bill is to 
solidify Amtrak's role in providing intercity passenger rail 
service. That includes a Federal policy for corridor 
development and for the improvement of our long-distance 
services so that they better link State and regional corridors 
and become a more relevant transportation alternative. Amtrak's 
reauthorization should also help us take advantage of 
opportunities to connect Amtrak's intercity trains with other 
modes of travel.
    For each of the strategic goals and objectives we are 
developing, we will outline a series of specific actions to be 
taken. It is clear to me that our future hinges on our ability 
to become more cost efficient and to develop a superior product 
for our passengers. As I have stated, the central part of our 
strategy is to focus our efforts on meeting the needs of 
States, but while we work with States to develop and to expand 
intercity corridors, we will not forget or overlook the 
importance of the Northeast Corridor.
    The Northeast Corridor is the realization of what a mature 
corridor should be. As future hearings will address Amtrak's 
specific capital needs, at that time we will talk more about 
what we need to do and would like to do in the Northeast 
Corridor.
    Again, in conclusion, it is remarkable that a few years 
ago, many felt Amtrak would continue moving into more and more 
serious difficulty. That is no longer the case. Reliability, 
mobility, and environment, these are things that consistently 
resonate with America's traveling public, particularly in an 
era of rising fuel prices, highway congestion, and heightened 
interest in environmental protection. Amtrak continues to be 
the most promising and welcomed alternative.
    Thank you for your time, and I will be happy to answer any 
questions.
    Ms. Brown of Florida. Thank you to both of you.
    You know, if you do not have a plan, then in the next 5, 
10, or 15 years, we could end up anywhere. And so that is why 
the plan of having those benchmarks and of having that 
information is important for us as we develop our budget, as we 
develop how we can assist making sure that the infrastructure 
is in place. And so I would like for you all to explain to us 
when we get back--it's June 12th, 2007, and we have been asking 
for this since April-May. I mean we really started asking for 
it in January when we took over the House of Representatives, 
when we started a new direction for Amtrak.
    So as we leave--we are going to have to adjourn for about 
45 minutes--perhaps that will be the first question that you 
could answer when we come back. We have three votes, and then 
we have got to take our class picture, so we will be back in 
about 45 minutes.
    Mr. Shuster. You are going to get plenty of time to think 
about it.
    Ms. Brown of Florida. Yes.
    Mr. Shuster, do you want to add anything to that?
    We will start off with that. Thank you.
    [Recess.]
    Ms. Brown of Florida. Okay. We can come back to order.
    I think I had given the first question, so you have had 
plenty of time to tell us what the status is and to explain for 
us why we have not gotten the information we requested and how 
we are going to move forward.
    Mr. Laney. Let me answer that question, Madam Chairman, if 
I may.
    We have, as you know, a new President and Chief Executive 
Officer. We have a virtually entirely new management team, 
senior management team. We have three of five Board members who 
are relatively new. And I guess I will assume the 
responsibility for the delay because it has been my job, as 
best I can, to align what amounts to very independent, very 
involved opinions, all very focused on the future of Amtrak. 
And we have been at this process longer than I would like. I 
think we are all a little weary of it. And we have known, at 
the same time, that you and your staff have been very anxious 
to have a copy of a final, publishable version of this plan.
    As you know and I know, you have a draft, and with that 
draft came a little bit of a cautionary note that the front 
end, first few pages of that, would change fairly dramatically 
or might change fairly dramatically; and in fact, they have 
changed very dramatically. But the financial piece of that, as 
well as the strategic targets and actions over the next 18 
months and beyond to deliver the results that we have focused 
on, are there very clearly delineated in the draft that you 
have. You should have the final copy, I believe, of the plan no 
later than midweek next week. And in fact, I would be able to 
deliver one to you today, but there are a couple of outstanding 
issues that are very material that need slightly more 
refinement and resolution. And part and parcel of the challenge 
is we have Board members who are scattered to the winds and who 
have their own independent lives and livelihoods they need to 
take care of, and it is hard to get everyone at the same place 
at the same time.
    It is no excuse. It has been my decision to slow it down 
for quality's sake. I would much rather deliver something of 
higher quality than of higher speed, so we will have it to you 
shortly. My regrets.
    Ms. Brown of Florida. Well, let me ask one other follow-up 
question here.
    Mr. Kummant has been the Amtrak President and CEO since 
September 2006. How would you rate his performance?
    Mr. Laney. Well, he probably cringes as I punch my talk 
button and begin the discussion here, but Mr. Kummant has 
stepped into a whirlwind of activity, and has been on a very 
steep learning curve, and has learned and has understood this 
business, principally I think because of his background and his 
training, faster than I could have imagined. I expected that at 
the time we hired him, and he has done a superb job of 
assembling a senior management staff, and has in effect taken 
control of an organization that was already moving fairly 
quickly forward in a direction. He picked up on that direction 
and gave it a little more shape and direction, and worked very 
carefully with the Board to try to deliver what you are about 
to see next week. So I give Mr. Kummant a very strong "A" for 
performance over the last few months.
    Now, that could slip, of course----
    Ms. Brown of Florida. Of course.
    Mr. Laney. --but so far so good.
    Ms. Brown of Florida. So far, that is good. That is very 
good to hear, too.
    Mr. Shuster.
    Mr. Shuster. Thank you.
    I mentioned in my opening statement the importance of some 
of these high-density corridors, the Northeast Corridor I think 
being the number one corridor in the country for your train 
service. And I see you have had some significant improvements 
there, not only in ridership but in improved revenues.
    Have the folks at Amtrak done any recent studies on the 
price tag of what it would cost to make the Northeast Corridor 
a truly high-speed rail corridor where you could have a train 
getting speeds up to 180 miles/200 miles an hour?
    Mr. Kummant. Let me answer that in a general case.
    First, what we have looked at is a gradual increase of 
velocity and, really, of the reduction of trip time and of the 
reduction of slow orders. The notion of even taking that 
corridor to sort of a European high-speed standard is really, 
frankly, very remote, given the commuter traffic on that line 
as well. And we do run in a mixed mode. There are something 
like 50 freight trains on that lane as well. So the notion that 
it is going to be a true, dedicated high-speed line is probably 
not in the cards for a long time.
    What we are looking at and, in fact, are in the process of 
launching--we are meeting, in fact tomorrow, with very high-
level folks from all of the Departments of Transportation, the 
States, and the high-speed corridor--is to really create a 
capital master plan looking out over the next 10 to 20 years in 
order to identify what really needs to be done on capacity 
overall.
    So that is: What do we need to do with bridges? What do we 
need to do with tunnels? How do we get through New York City 
faster? How do we get through Baltimore faster? How do we 
expand slots for commuters? How do we increase overall train 
miles for Amtrak?
    So that work will be going on here very seriously over the 
next year. But as to the notion of pure velocity, I would say 
it is highly unlikely you will see much more than what we see 
at our peak in Connecticut and in Rhode Island of 150 miles an 
hour.
    Mr. Shuster. And unlikely unless we build a dedicated line?
    Mr. Kummant. Yes. It would have to be, really, a 
dramatically new structure. And in fact, you would have to 
decouple the commuter network from our network because it is 
unlikely that you would really mix those two modes.
    Mr. Shuster. Would you have to put a 100 percent dedicated 
rail or----
    Mr. Kummant. Yes. I mean that would be the extreme. I would 
imagine, you know, you might have to put some sort of--and I am 
just making this up, and there are probably people cringing in 
the audience, but I mean you would have to put major bypasses 
around cities in order to do that----
    Mr. Shuster. Right.
    Mr. Kummant. --of probably large sections that would be 
completely new at a very high cost.
    I would say there is a great deal that we think we can do 
with the existing structure, and the real trick here is not so 
much reaching higher speeds, but it is reducing disruptions. 
Again, an example is we drop down to 20, 25 miles an hour for a 
pretty long stretch through Baltimore. So if you would 
eliminate that, you would get a whole lot more out of that than 
if I took 150 miles an hour to 160 miles an hour through some 
of the wide open stretches. So it is really reducing those rail 
delays that is key.
    Mr. Shuster. Do you think you can get the Acela up to the 
speed of 110 miles an hour?
    Mr. Kummant. Well, on an average basis, I would have to 
talk to the engineers about that sort of calculation, but we do 
hit 135 south of New York, and we do hit 150, again, north of 
New York, and I think we can certainly--south of New York, 
there are a lot of projects. The quality of the catenary, the 
actual conductive wires that run over the track, is something 
that we will be gradually renewing south of New York, and that 
is very much a determining factor as well on velocity. So there 
is a lot we can do.
    Mr. Shuster. I know the Keystone Corridor has been very 
successful--Harrisburg to Philadelphia. The average speed is 
110; is that correct?
    Mr. Kummant. Yes, I think we get up to that. And you know, 
we cut--I do not know--something like over a half an hour in 
travel time, and we are up to 85 percent on-time almost. So----
    Mr. Shuster. It has been very, very successful.
    Are you going to be able to use that as a model or to 
duplicate that in other places in the country?
    Mr. Kummant. Yes. I think there are some unique issues 
there. One is that there are very few highway crossings and 
very few road crossings there. It was a very well-engineered 
railroad to start with. It was originally electrified. I think 
there are a couple of other areas around the country we would 
like to look at, but I think one of the more interesting things 
as well is to look at some of the bigger corridors between 
population centers where, nevertheless, we could cooperate with 
the freight railroads and perhaps with major capital infusion.
    If you look within Florida, Florida certainly has a great 
population center, opportunities out of Miami. D.C. south to 
Richmond is very congested. There are very big needs. If you 
look at L.A. North to the Bay Area, there would be 
opportunities there. You know, you are talking about 
significant capital, but you are also talking about significant 
population centers. Detroit to Chicago would be an example. 
There is a 35-mile stretch across Indiana that is very 
difficult to get across, but we actually own almost 100 miles 
of track into Michigan where we run almost 100 miles an hour, 
95 miles an hour. So there is a lot, I think, around the 
country that could be done.
    Mr. Shuster. I have one last question. I see my time has 
expired.
    Are we going to get another opportunity?
    Ms. Brown of Florida. Yes.
    Mr. Shuster. Okay.
    Just really quickly, how many high-density corridors are 
there in the country? I think I read somewhere there are 17. 
Does that sound right?
    Mr. Kummant. Forgive me, I would have to ask. There are 
designated corridors--I can look over my shoulder here.
    There are 13 designated corridors.
    Mr. Shuster. All right. Thank you.
    Mr. Kummant. Sure.
    Ms. Brown of Florida. The Chairman of the Full Committee 
has joined us, Mr. Oberstar.
    First of all, let me just thank you for conducting the last 
two hearings when I had to be in Florida with family 
obligations, but I know no one missed me because the 
transportation guru was here. And I am just really pleased with 
the leadership that you have provided for our Committee, and we 
are moving forward. I will turn it over to you at this time for 
any comments and questions that you may have of our panel.
    Mr. Oberstar. Thank you, Madam Chair. On the contrary, you 
were very much missed. Your insight and your driving force and 
your commitment to Amtrak and to passenger rail service and to 
the whole issue of freight rail is well-known and greatly 
appreciated. And we missed you, and we certainly hope your 
family, your mother and grandmother, are doing well.
    Ms. Brown of Florida. Yes.
    Mr. Oberstar. That is reassuring. That is wonderful.
    Mr. Kummant, you come to us, for once, with some good news 
about Amtrak. It is not a surprise because those of us on the 
Committee have been following things very closely. And I liked 
Mr. Shuster's question, but I did not like the answer.
    When are you going to get up to speeds of 185 to 200 miles 
an hour as they do in Europe? It is a good question. The answer 
is, as you said, not for a very long time, maybe not at all.
    I cannot accept that answer, because we can achieve those 
speeds. We can improve. It is a matter of priorities. It is a 
matter of capital investment. It is a matter of the mechanics 
of the operation of our passenger rail system, and whether this 
Nation--it is not whether Amtrak is willing but whether this 
Congress, speaking for the people of the country, is willing to 
prioritize and to make the investment that we need to make in 
the capital account to make Amtrak the best that it can be, the 
best that we know it can be.
    You cited a moment ago the need for improvement in the 
catenaries. That is just one of the capital investment needs of 
Amtrak not only in the Northeast Corridor, but it is one of 
many capital investment needs across the country.
    I have to tell you that I am disappointed that 3 months ago 
I asked for a listing of the capital investment needs of Amtrak 
in a meeting that we had in my office, and it took 2-1/2 months 
to get a document. Now, if Amtrak is serious--and you know what 
your needs are; you know what the requirements are; this was 
not a list that I asked for as an endorsement by Amtrak, but as 
simply a listing of all of the capital account requirements 
that then we could evaluate and prioritize and decide which 
ones we were going to fund first and which ones we could get 
money through the Appropriations Committee for, those for which 
we could bring the administration along, but it did not need to 
go before the Amtrak Management Board to be reviewed. I have to 
tell you that. I am very, very disappointed about that 
attitude.
    I have said many times how my own experience with passenger 
rail deteriorated over the years. I have seen it unfold before 
my eyes. When I was on my way to graduate studies in Europe in 
1956, I went by train from Minneapolis to the East Coast. The 
first leg was on the Milwaukee 400-- 400 miles in 400 minutes. 
That was the premiere passenger service of its time; at least 
we thought so in the Midwest. Now you can hardly get to Chicago 
by air in 400 minutes. By the time you drive to the airport, 
park your car, go through security, have a ground stop and an 
air hold and a weather problem, you cannot even do it by air. 
But we can do that by rail if we ignite the Midwest Rail 
Initiative, which was one of the projects recommended in the 
study of passenger rail initiatives, corridors, in pursuance of 
the direction and the funding for it in ISTEA of 1991. I was 
the author of that language.
    So of nine of your studies, six were recommended. The 
Midwest Rail Initiative was the primary hope for success.
    Let me ask you and Mr. Laney: What does it take, now going 
forward, to sort of inspire the Midwest Rail Initiative to get 
started?
    Mr. Kummant. Well, I think--well, what we are working very 
hard at, as I have alluded to in the past, is in pivoting our 
whole organization to face the States. So as we engage with the 
State DOTs and with the States and with the groups of regions, 
I think we really can articulate their particular needs, and, 
as you said, we can come up with very specific capital plans. 
But we also have to do that in conjunction with the freight 
railroads because, again, those are clearly along those rights-
of-way, but we continue in those dialogues very intently.
    I am very interested, for example, as I have alluded to 
before, in looking at Chicago-Detroit. There is, I think, a 
large but manageable piece of capital that would get us across 
Indiana much more quickly. And I think all of those dialogues 
are occurring with a lot more intensity as we pivot our whole 
organization to make that our future. We have said very clearly 
that, going forward, the States are our future, and that is 
really where the ridership is going to be.
    Mr. Oberstar. There is the Northeast Corridor where you 
have this massive population concentration, where there is a 
rail infrastructure in place for passenger service, and it can 
go all the way down the East Coast to Florida.
    Then you have the Midwest. Then you have the long line 
across the northern-tiered States to the Pacific Northwest, 
Seattle. Then there is the California connection where, as your 
figures showed, passenger service is growing some 21 percent, 
and the State of California is a willing partner.
    Here in the Midwest, within 300 miles of Chicago, are 17 
percent of the flights in and out of O'Hare. If we removed 15 
percent--even, say, 10 percent--that would be a reduction of 
about 100,000 operations at O'Hare Airport, freeing up short-
haul airspace and taxiways and landing and parking space. Free 
that up for long-haul service, which is far more valuable than 
300-mile short-haul service in aviation, and provide that by 
rail.
    St. Louis lost its nonstop service to London Heathrow when 
Carl Ichan bought TWA, sold it off, sold off that nonstop route 
to American Airlines. Then, eventually, TWA declined and was 
absorbed by American. They have no nonstop service abroad.
    You could take a high-speed train from St. Louis to 
Chicago, be there in 2 hours, have your bags checked through 
security, carried on a secure railcar, check right into O'Hare 
and, as a passenger, board in a secure environment and get 
frequent flyer miles for your rail travel, fly off to London or 
wherever else in Europe that passengers typically go from that 
airport, and continue that service Chicago, Milwaukee, Madison, 
Minneapolis-St. Paul.
    Then you cited the sections going east. That makes so much 
good sense to have an intermodal passenger rail service system. 
We need the Midwest Governors to get on board and to be part of 
this thing. I have a problem in my own State. My own Governor 
of Minnesota does not see the bigger picture, but I am working 
on that. I would like Amtrak to take some initiative here and 
to lead the way. Stimulate the States. Motivate them to get 
going.
    Now it has come back to the Northeast Corridor. As Mr. 
Shuster said, we would sure like to see much higher-speed 
traffic on the East Coast. You would have a massive growth in 
passenger service. Ms. Brown has advocated this many, many 
times throughout hearings we have held over previous years.
    You mentioned that in the Baltimore area, speeds are 
reduced to 20, 25 miles an hour. What does it take to upgrade 
the speeds there?
    Mr. Kummant. Again, that is the fundamental tunnel issue, 
and that is a multibillion-dollar issue. It is probably about a 
$2 billion issue to build either a new set of tunnels or to 
entirely refurbish those tunnels.
    If I may, sir, I would like to go back and just, again, tip 
my hat to Illinois. You pointed out the tremendous 
opportunities there. Now, we are talking about the conventional 
speeds, but that is a State that has doubled its commitment, 
its financial commitment, and it is pushing very, very hard to 
even put, you know, multibillion dollars out from a State 
level. So I think that is a great story, and we expect to 
continue to work very closely with them as well. But, again, 
Baltimore--getting back to Baltimore, again, a multibillion-
dollar new tunnel issue is the fundamental----
    Mr. Oberstar. That needs to be spent for security purposes, 
a good deal of it for safety purposes and the balance for 
improving travel speeds in the corridor. But give us some 
figures on this. Give us some hard numbers and analyses and a 
suggested incrementalization of the investment. We will address 
the funding issues. We will be the advocates for it here on 
this Committee, but we need you to help us with the numbers. 
You are the ones who are "in the know" on the capital 
requirements.
    I will withhold further, Madam Chair, at this point.
    Ms. Brown of Florida. Thank you, Mr. Chairman.
    Mr. Brown. Did he leave? He stepped out. Okay.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Madam Chair.
    I was reading also, with great interest, a portion of our 
memo that gives us information, and it talks about the track 
conditions of the private rail that you use.
    In what condition would you need them to be to be able to 
provide either faster service or on-time delivery service? 
Because if they are not upgrading their infrastructure, you are 
suffering. How is that affecting you to be able to carry out 
your mission?
    Mr. Kummant. Sure. There is no question it is a significant 
issue. We, for example, have just signed a new 6-year agreement 
with Union Pacific where they have specifically designated a 
reduction in delay time that is associated with slow orders. So 
there is no doubt, if you look at some of our major routes, 
slow orders are a big issue for us and hurt us on some of our 
long-distance routes.
    We also have in the summer heat order issues where, when 
temperatures rise over a certain degree, different railroads 
have different approaches to slow down their railroad for 
safety reasons; and that, in a sense, is also an infrastructure 
expenditure issue.
    So, again, it is a difficult dilemma for the freight 
railroads. They are fundamentally geared economically toward 
supporting freight and freight velocity, and they are trying to 
generate a return on capital for their shareholders. 
Nevertheless, clearly, there is a bit of a natural conflict 
with the type of slow order reduction velocity we need to 
really be effective. So that is a challenge, and we continue to 
work through that with each of the railroads.
    Mrs. Napolitano. Well, given that, especially on the West 
Coast, you are going to have an increase in traffic that is 
going to further constrain the use of the UP or of the NSF 
lines, how are you working that out? Are you working with not 
only the railroads but also with the States to be able to find 
a way to be able to do all of the above--upgrade the 
infrastructure, find a better relationship so that you will be 
able to share more of it? Because they are going to be 
increasing the use of their rail capacity. What will you do 
then?
    Mr. Kummant. Well, again, there are no silver bullets 
there. It is day-to-day management. It is bringing the 
respective organizations closer together. We are spending more 
time with their dispatch operations to understand how they can 
dispatch more effectively. Our engineering groups do get 
together. Again, we have got very specifically targeted capital 
programs to reduce slow orders. And going forward, I can 
certainly envision, as we talk about Federal-State capital 
grants or matching grants, that those funds can go to 
debottlenecking very specific capacity constraints. And then 
that is an area in which we will have to continue being active, 
going forward, where we just really sit down with the freight 
railroads and say, you know, "Here are a whole series of 
projects. What is the schedule? How do we get through them? How 
do we fund them?" it is about capital. It is about reducing 
constraints.
    At the same time, certainly, every projection one reads 
over the next 15 years is still for dramatic freight volume 
increase, so there is no doubt there is an overall challenge 
with the capacity of the entire freight network.
    Mrs. Napolitano. How are you planning to address it?
    Mr. Kummant. Well, again, we do not have a simple solution 
to that other than going through, identifying and prioritizing 
bottlenecks and working with the freight railroads to put 
capital into those areas.
    At the end of the day, it is an intersection of essentially 
a private company and public policy where--and this is just a 
personal view--we are collectively going to have to find more 
and more ways to get public capital into debottlenecking the 
overall rail network.
    Mrs. Napolitano. Well, Amtrak got to reach much of the 
ridership gains in recent years due to collaborative efforts 
with the State governments.
    Can you describe what those partnerships have been? How 
have they been successful? Are you continuing to press forward 
on those?
    Mr. Kummant. Sure.
    Great examples, again, have been mentioned here in some of 
our opening comments. California, for example, since 1990 has 
put somewhere between $1.8 billion and $1.9 billion into the 
railroad infrastructure themselves, and those are unmatched 
dollars. Illinois has done something similar. They also have 
doubled their support number over the last couple of years. The 
State of Washington has done a very good job in collaborating 
with BNSF in terms of putting something between $300 million 
and $400 million into their rail infrastructure. And if you 
look at those three States, that is where the frequencies are; 
that is where the real growth has been; and that is where the 
State corridors are doing very well.
    Mrs. Napolitano. So there is a correlation, then, between 
the success for economic development, so to speak, and the 
ability to get your goods delivered on time.
    Mr. Kummant. Very much so, yes.
    Mrs. Napolitano. Thank you, Madam Chair. I will wait for 
the next round.
    Ms. Brown of Florida. Yes.
    I see that the Ranking Member, my colleague from Florida, 
has joined us. Mr. Mica.
    Mr. Mica. Thank you.
    I am pleased that the Rail Subcommittee is asking for some 
of Amtrak's strategic reform initiative information.
    I probably share the Chairman of the Full Committee's 
interest, too, in trying to get in the United States one high-
speed rail corridor. I was not here during his questions. I was 
preoccupied. It was my understanding that Mr. Oberstar had 
requested information on what it would take to get the current 
Northeast Corridor up to a higher speed.
    Is any information being prepared in that regard?
    Mr. Kummant. Yes. I mean, we certainly have prepared and 
have submitted quite a bit of information on trip time 
reductions which, in the end, are average velocity improvement.
    Mr. Mica. Right now, our average speed is, what, 84 miles 
an hour?
    Mr. Kummant. I understand it is something in that 
neighborhood. But I do understand his fundamental question or 
that the question at hand was: Will we anytime soon exceed 150 
miles an hour as a top speed? Given the current overall 
structure, I said that that would be highly unlikely, but we do 
have a whole series of projects that includes continuing trip 
time reduction.
    We are also, in fact tomorrow, launching a capital master 
planning effort in a collaborative effort with the States along 
the Northeast Corridor where we will go through and really look 
at a 20- to 25-year vision on how do we really grow the entire 
corridor, what is the future of the commuter, where do they 
need slots, how do we increase velocity?
    Mr. Mica. Okay. Commuter versus high speed, you are going 
to look at both?
    Mr. Kummant. Yes, sir. Well, we are looking at the corridor 
in totality in terms of----
    Mr. Mica. I think you--and again, I was not here, but first 
of all, what is the maximum speed you could get out of the 
system if you put into play all of the improvements that you 
could out of the current trackage that you have?
    Mr. Kummant. Well, again, our peak velocity is 150, and I 
would have to go back and look at what an overall average speed 
trip time would be.
    Mr. Mica. I have not seen anything that exceeds like 85, 89 
miles an hour. Is there something that you have?
    Mr. Kummant. It is probably not dramatically more than 
that, but we would have to go back and look at that.
    Mr. Mica. And I think you answered his question.
    To get to TGV speeds or true high-speed rail, you would 
have to develop a separate corridor?
    Mr. Kummant. Essentially. Or you would have to take major 
segments of the corridor and develop a dedicated line.
    Mr. Mica. Why not have us put out for bid a contract on the 
Northeast Corridor to put in high-speed service?
    Mr. Kummant. Well, again----
    Mr. Mica. I mean that is not your decision. That is 
Congress' decision. Would you oppose that?
    Mr. Kummant. I do not oppose in principle looking at new 
alternatives, looking at----
    Mr. Mica. Actually, it would do quite a bit to free up that 
corridor for both freight and commuter service.
    Mr. Kummant. Well, it is a very broad question.
    Mr. Mica. If I took Acela, your high-speed service, off 
there and we just did commuter and local and freight service, 
wouldn't that dramatically free up the corridor?
    Mr. Kummant. Well, if you look at overall train miles, we 
are still the dominant user in train miles. So certainly it 
would open up a corridor for commuters, but you would 
essentially lose, you know, 10 million riders that we have 
today.
    Mr. Mica. Ten million riders for what?
    Mr. Kummant. For noncommuter service. That is the Amtrak 
and----
    Mr. Mica. It is Acela?
    Mr. Kummant. It is Acela and our regional product, yes.
    Mr. Mica. Well, again, you have heard of Richard Branson 
and what he did. He bought into the two north-south lines--one 
going up towards Edinburg, the other having 33 million 
passengers. Your total passengers are, what, 26 million for the 
entire system?
    Mr. Kummant. Twenty-five million.
    Mr. Mica. Twentyy-five million for the entire system.
    Mr. Kummant. Right.
    Mr. Mica. He just took those two corridors--and we had the 
rail folks in-- he put 10 billion U.S. dollars and 5 billion 
pounds into it. He put in all new equipment. He increased the 
ridership from 33 million to, I think, in the 44-million range, 
and he paid a dividend for the last 3 years.
    Now, I have asked continually for you all to separate out 
the Northeast Corridor activities and finances. Has that been 
done yet?
    Mr. Kummant. We are in the process of really restructuring 
our whole system. Our whole financial reporting system is----
    Mr. Mica. Can you tell what it costs to run the Northeast 
Corridor?
    Mr. Kummant. You can essentially tell what it runs, but we 
have legacy financial systems that we are working through. We 
have a new CFO, a new CIO. It is a very broad effort to really 
improve the financial clarity and transparency that I have 
committed to.
    Mr. Mica. Do you have the authority to contract out for 
services? Say if we wanted to take the Northeast Corridor, 
which is the only asset you have, you accumulate scattered 
assets and bid that out, both for the development of the 
corridor and for the operation of the corridor, do you have the 
authority to do that now?
    Mr. Kummant. It is really varying opinions on that because 
there is a whole underlying tax structure of the organization. 
It is not entirely clear how easy it is.
    Mr. Mica. It might have to be separated out by law?
    Mr. Kummant. That is an under----
    Mr. Mica. It could be done.
    Mr. Kummant. It is not a piece of work we have worked on 
over the last year.
    Mr. Mica. Finally, I went up to New York City and got a 
briefing on the Madison Square Garden moving Penn Station; and, 
first, my eyes were opened. I never realized that Farley 
Square, the Farley Station, which is the principal rail station 
when all the mail was brought in, I guess, from the '30s 
separated in Farley Station, which is about a block long. You 
ought to go up and see it.
    Farley Station is basically vacant property. It is only the 
Federal Government could screw up a potentially productive 
asset, leave it sitting like that. I think they said they had 
12 stamp windows where they sell stamps. And the final decision 
on relocating the rail, part of the rail service in that 
location, part of the hang-up is getting Amtrak to make 
decisions. I am sure it is part of a larger picture.
    Do you have any idea when you would be prepared to make a 
decision on developing that asset? The plan, as I understand 
it, is to take Madison Square Garden, rebuild it where Farley 
Station is. That would be a new passenger terminal. Then go 
back, got Madison Square Garden, put a couple towers and 
additional service that would be sort of intermodal and sort of 
cross-platform transfer.
    When do you think we will be able to move on that?
    Mr. Laney. That is not our decision.
    Mr. Mica. Who would make the decision?
    Mr. Laney. The decision--we are part of the decision, and 
we are moving forward quickly, but it is led by some developers 
in New York; also, the State of New York; also, the City of New 
York. There is a development authority involved and a number of 
other parties. We are working as cooperatively and 
constructively and effectively as we can to move it forward, 
but it is a very complicated project, as you know. We would 
love to see it materialize. I think a lot of the oddsmakers put 
it at less than 50 percent.
    Mr. Mica. Well, there was about $300 million, I think, some 
seed money from Congress. The deal could be put together if 
everybody at the different governmental levels would make the 
decision, because there is nothing but revenue to be gained out 
of a project like that. It will support itself. I am just a 
small-town developer, but that project will work if we get a 
pledge from you all to continue working, which I am sure you 
will do.
    I have more questions, but I will reserve the balance of my 
time.
    Ms. Brown of Florida. All right. We want to give him as 
much time as he needs.
    Let's go to Congressman Cummings, then come back to you.
    Mr. Cummings. Thank you very much, Madam Chairlady.
    Mr. Laney, I have always had concerns over the last several 
years about Amtrak not getting the kind of support that it 
needs to sustain itself. As one who lives in the northeast 
section along that corridor in Baltimore, a lot of my folks 
depend upon Amtrak; and to that end I want to ask you just a 
few questions.
    First of all, going back, there have been all kinds of 
proposals about the States taking more--putting more money into 
Amtrak services. I mean, is that where the Board is going?
    Mr. Laney. The short answer is, yes, that is where the 
Board is going. Because, ultimately, we need support from a 
capital standpoint for growth; and as the Federal operating 
support diminishes, we are going to need some sort of 
supplemental support from States involved. A lot of States, as 
you heard already, are heavily involved on an unmatched basis, 
but we have been pressing very hard for the importance of an 
addition of a match funding program of some sort in the 
reauthorization. But, yes, sir, the short answer is yes.
    Mr. Cummings. With regard to capital funding--I don't know 
what you may have discussed before I got here, but I apologize 
to keep repeating--Amtrak's own fiscal year 2008 grant seeks 
$1.5 billion, is that right, on Federal funding--in Federal 
funding, including $760 million in capital funding, is that 
right?
    Mr. Laney. Yes, sir.
    Mr. Cummings. The DOT Inspector General has indicated that 
at least $1.4 billion, or roughly double what is requested by 
Amtrak, is required to keep the system from falling further 
into disrepair. Are you familiar with that?
    Mr. Kummant. Maybe I can chime in briefly. I believe the 
DOT Inspector General suggested that for a total funding level, 
including the operating support number, that he felt we would 
need 1.3 to 1.4 billion. So I believe the number that we are 
talking about is an all-in number, which actually is fairly 
consistent with our view.
    Mr. Cummings. So what do we need for capital repairs and 
maintenance. Is that the figure you are saying?
    Mr. Kummant. The $700 million really includes all those 
figures.
    Mr. Cummings. Now where are we on this labor agreement? I 
spoke before with the unions, must have been a month ago; and, 
you know, when they told me it has been 7 years, I just 
wondered why is it taking so long to come up with an agreement.
    Mr. Kummant. Let me address that, sir, if I may.
    First, I share that. I would love nothing better than to 
have that behind us so we can really get on and run the 
railroad.
    We are in the middle of actually very serious dialog with 
three different unions. We have one deal that is out for 
ratification, one that is I believe very close to a handshake 
deal to move forward, and another where we have had a high-
level discussion and an agreement to come in and have a very 
detailed discussion.
    I think, as you know, the issues we really have on hand, 
first, we have put a very competitive pay package on the table 
that is very similar to what was just ratified with the freight 
railroads. So we are very consistent there.
    There does remain, obviously, a very difficult question of 
the unions asking for a back pay number. That back pay number 
in total would have a $200 million price tag on it. What we 
have on the table is a bonus payment, which is less per person 
clearly than the total back pay but is something that we can 
fit into our total financial profile. So, absent some sort of 
action entirely outside of our financial ability, that $200 
million would really be impossible for us to deal with. But, at 
the same time, I do think that there is a number of discussions 
and very serious, honest discussions we are having that are 
moving toward a potential agreement.
    So we do have a bonus payment on the table, we do have wage 
rates that are very competitive with the freight railroads, and 
we are clearly--and I am sure you have heard this. What is very 
important to us is workplace flexibility issues, and that often 
becomes one of the sticking points in our discussions with the 
unions.
    Mr. Cummings. I see my time is running out, but let me just 
ask this last question. The differential between--you kept 
mentioning freight, and I appreciate it, but what about the 
difference between Amtrak workers' pay and, say, transit 
agencies, other transit agencies?
    Mr. Kummant. Some of those gaps have grown; and, honestly, 
that is the result of only having some COLA for 7 years. 
Sometimes you will hear gaps referenced that will be much, much 
narrower after a deal. But there is no doubt that large gaps 
have opened up along many of the trades and many of the types 
of occupations, and that is a big concern, and that is another 
reason that I very much would like to get some deals done. We 
will never be able to head to head completely compete with some 
of the very high-paid railroads, for example, Long Island 
Railroad, but we can close that gap substantially.
    Mr. Cummings. May I ask one more question, Madam Chair? 
Just one.
    Ms. Brown of Florida. Yes, sir.
    Mr. Cummings. Just one.
    I guess one of the things that concerns me is it seems as 
if we--the argument that you hear made all the time is we pump 
a lot of money into air, the air industry and others, and then 
when it comes to trains--the other day somebody stole my car, 
and I took the train over from Baltimore. And, I tell you, I 
had a chance to really talk to some folks. It was a blessing in 
disguise. But I said to myself, these people get up early--I am 
talking about I caught the train at 6:15--and they work hard.
    I am trying to figure out when you all look at your numbers 
are you all saying we just accept what we are told to accept? 
Do you all come up with the numbers? Does somebody else come up 
with them?
    Because, in other words, I am trying to figure out can we 
do more or are you all in the position as the Board to say, 
look, this is what we need to really do this, and this is what 
we need to run a first rate--and do you ever say, look at what 
you are doing for the airline industry?
    But we have got hard-working Americans getting up at 4:30 
every morning trying to make it and then these employees doing 
the best they can with what they got. Do you ever make any of 
those arguments?
    Mr. Kummant. We have got a great workforce.
    Mr. Cummings. I know. That is my point.
    Mr. Kummant. I will say this. The Board has moved 
substantially, and the numbers that we put on the table in 
March are very, very different and I think show a real 
commitment to trying to get there. So I would say we are doing 
everything we possibly can, and I am personally involved, I 
personally, through the numbers. I see the comparisons. So I 
say it is a very personal issue for me, and I am very committed 
to do what we can, and I think we have got some very fair 
packages on the table.
    Mr. Cummings. Thank you, Madam Chairlady.
    Ms. Brown of Florida. Thank you for raising those issues, 
all of the Members.
    Let me say for the past 6 years we have been doing all we 
can just to keep Amtrak afloat when the administration provided 
zero budgeting they recommended. So now that we have a change 
in leadership in the Congress I feel that we are moving forward 
and we are making progress, but it is very important on this 
one particular area in the area of labor negotiations and 
agreements that we do come to some conclusion because we want 
to move--I mean this Committee--we want to move the industry 
forward as we move freight; and we want to move Amtrak forward, 
also.
    So as a follow-up question, one that I have heard a lot 
about, back pay. It has been since 2000 when the contract 
expired, but the Amtrak board decision not to give back pay, 
can you talk to me about that? Because it is a major problem. 
It is like the story of the chicken and the pig. They have 
given all, the Amtrak employees. So where are we with this back 
pay issue?
    Mr. Kummant. It is no doubt a sticky problem; and let me go 
back a little bit, to 2002. David Gunn actually sat with a 
group of union leaders and laid out five principles for labor 
settlement back in 2002. The very first one is the freight 
railroads had just agreed to a deal; and he said, we will match 
that freight railroad deal or be competitive with that deal. 
Number two, we need workplace flexibility; number three, we 
need health insurance containment; number four, no workplace 
flexibility will result in a furlough of any employee; and, 
number five, we will not offer back pay. That was back in 2002.
    The intent at that point was for all parties to quickly try 
to move to some sort of resolution. Unfortunately, here we are 
7 years later; and that one principle has now ballooned into a 
$200 million issue. Again, that alone, if you were to say, hey, 
let's just write a check for that, we are not capable of doing 
that within the framework of our own financial structure. That 
is the simple reality of it. We can probably meet on a bonus 
payment something between 30 and 40 percent of that, and that 
is the basic structure, the types of offers we have on the 
table today for the back pay issue.
    Ms. Brown of Florida. Mr. Laney, can you speak with that, 
as chairman of the Board? Because, I mean, the Board has to, I 
guess, approve whatever recommendation.
    Mr. Laney. Yes, ma'am, we do. I don't know that I can add 
anything to that.
    Ms. Brown of Florida. I just want to hear you on the record 
where you stand.
    Mr. Laney. Well, let me just say that I have been here 
since about the time David Gunn mentioned or laid out to the 
union those principles, and I agreed with him then, and I agree 
with those principles now.
    The ultimate issue from our standpoint is workplace 
flexibility or, as you have heard it called otherwise, work 
rules. Without some additional flexibility in a significant 
way, there is not much future from an economic performance, 
financial sustenance standpoint for Amtrak, as far as I am 
concerned.
    Back pay is a sticking point, but, as President Kummant has 
just said earlier, I think we are within striking distance of 
some resolution with our major unions, and I would like to see 
us go there. It would be very helpful for all parties to move 
forward and move past the back pay issue.
    Ms. Brown of Florida. Okay. I would like to ask unanimous 
consent that Mr. Baker be allowed to participate in today's 
hearing and sit in with questions to the witnesses.
    Without objection, so ordered.
    Mr. Baker.
    Mr. Baker. Thank you, Madam Chair. I appreciate the 
courtesy extended and that of other Members and the witnesses 
who are anxious to get on with the matters at hand.
    Mr. Laney, I want to revisit what I think I heard you 
express a moment ago relative to workplace flexibility. Your 
response was to the point--and I want to make sure that I do 
not mischaracterize--that without appropriate flexibility and 
workplace environment that the financial future of Amtrak is 
cloudy at best.
    Mr. Laney. The short answer is, yes, sir. There is so much 
pressure in the rail industry generally and on ours in 
particular in terms of efficiencies from a financial 
standpoint, and our biggest challenge from a financial 
standpoint is our labor costs.
    Mr. Baker. Let me, if I may----
    Mr. Laney. Can I add one thing?
    Mr. Baker. Certainly.
    Mr. Laney. What we envision over time is, as you have seen 
and heard from all Members, is there are a number of pressures, 
whether it is rising trends in gasoline prices or congestion in 
air and highways and the inability to fund an expansion enough 
to handle the loads of traffic on our highways, there will be 
rising levels of demand for rail. We have got to be able to 
address that growth and address it from a financial standpoint 
in terms of efficiencies that we cannot deliver right now 
without----
    Mr. Baker. I certainly understand. I don't think we want to 
be in the position of the more service we offer, the more money 
we lose, which gets me to the operational metrics. I have been 
concerned--and let me acknowledge at the outset I have not been 
the most ardent of Amtrak supporters, but it is not because of 
the disagreement with the basic purpose of the operation. It 
has been with a frustration over the lack of what I call 
appropriate financial metrics to understand where the pressure 
points may exist and to what extent services may be modified or 
changed in order to achieve what I believe is the intent to 
provide economical, on-time service to people who otherwise 
would not be served by any other provider.
    To that extent, would either of you have--or let me back 
up. Since my last visit to this subject matter over the last 18 
months, have there been no reporting methodologies, 
establishment of new or different metrics or financials in a 
better condition to be able to report operational bottom line? 
Do we have a better cost per passenger mile operational 
assessment? Have we had customer satisfaction surveys to find 
out what is good, what is bad? What is the progress with the 
Acela line?
    In other words, make me feel good that where we are today 
is not where we were 5 years ago when we were collecting fares 
on cars with cigar boxes and wondering why we couldn't figure 
out the cash flow.
    Do you have financials that are deliverables, that someone 
could look at and objectively say I know where we are and I 
know how much we are going to lose, and this is why?
    Mr. Laney. That is a lot of questions, and I am not going 
to try to answer them all. Let me start with answer one. Then I 
would like to give it to our CEO for a little more detail.
    One is, are we today where we were 5 years ago from a 
financial standpoint, from a ridership satisfaction standpoint, 
from our allover ridership and revenue standpoint? Absolutely 
not. It is a different operation than it was 5 years ago as far 
as I am concerned; and, more importantly, it continues to head 
in the direction I think you would like to see it head. As I 
said earlier before you were here, it has moved farther than I 
expected it would move, not as fast as I would hope.
    Mr. Baker. How do you square that with the opening 
statement that, unless we get workplace flexibility, the 
financial future of Amtrak is very bleak?
    Mr. Laney. I expect we will have workplace flexibility.
    Mr. Kummant. Well, let me just make a couple of comments 
about where I think we are really moving the ball and then to 
your fundamental question about structure of the financials.
    If you look at the Acela product, for example, and we do 
plenty of customer surveying. Customer satisfaction numbers are 
up significantly, and the share numbers are up dramatically. We 
are actually taking share from the airline industry along the 
Northeast Corridor.
    Ridership is up over 20 percent year over year. Overall, 
Amtrak revenue is up 11 percent year over year. We have a very 
specific measure of revenue per available seat mile that is up 
in almost every category. So there are very specific measures 
that we are doing well in.
    Safety tends to be something that within the railroad 
industry is very, very meaningful to rail guys, because it is 
such a measure of how kind of management and front lines work 
together. Safety is improved on a reportable incidentbasis----
    Mr. Baker. Let me get a couple things on the record, 
because my time is about to expire. They extended courtesy the 
allow me to do this.
    For the record purposes, if you can provide the cost per 
passenger mile--you can pick any two routes you want--between 
route A and B. If you can give me some year over year data, if 
you can show me where the projected operational deficit will be 
reduced over time and for what reasons or factors.
    The other thing I was going to start out asking, but I got 
diverted, there is an act that was passed in 1993, the Federal 
Program Performance Review Act, which is subject--a number of 
governmental agencies are subject to some sort of metric 
analysis, and I can't see why Amtrak would have been exempt.
    And I know the GSE argument, that you are not really fish 
or fowl. I don't go there. I think as long as you are getting 
operational subsidies from the government, there is a standard 
to report to the government to disclose why we are in the mess 
we are in.
    If you can at some point respond--not today--to whether you 
would have a policy objection to being made subject to the 
Federal Program Performance Review Act, and that is simply an 
ability for us as indirect shareholders to be able to get a way 
in which we can look at operations and feel better or worse 
about where we are going.
    I hate that the time has been so limited. I am sure you are 
enjoying it, but I really, really want to try to work with you. 
This is not about shutting Amtrak down. This is about trying to 
get us on a basis where we can all say we are standing on solid 
footing.
    I thank the gentlemen and the gentlelady for yielding time.
    Ms. Brown of Florida. Yes. Mr. Baker, I want to make a 
point here, because I am glad you came to the Committee, and I 
am glad you asked the questions.
    But on the other half of my concern, you, coming from your 
area, I had a question that I want to ask them on the Sunset 
Limited, when the people from that region have come to my 
office and have discussed that particular route is not 
financially--one that is financial--but there are other things 
I want them to consider when they develop whatever model, and 
one of them is homeland security.
    We need to have another way to get those people from that 
area out of harm's way. Amtrak would be one way, but that is 
not a profitable line. That is a problem. The profitability 
cannot be the only factor. Clearly, we need to have a way 
that--economics is part of the plan, but also we need to look 
at security.
    I have had several meetings with them. I have called Mr. 
Laney about this issue, because I want them to put that train 
back on and run it at a time that--not 2:00 in the morning. But 
if we had another Katrina, we would already be up in operation 
and could get those people out of harm's way. But it does not 
work for them financially.
    So I want them to consider other things other than just 
finance when they consider it.
    Mr. Baker. Would the gentlelady yield?
    I don't dispute the Chairlady's observations at all. There 
should be other considerations in determination of whether a 
public service is continued. All really I am suggesting is that 
we have that discussion; and if the gentlelady chooses to 
support the continuation of a route even with the knowledge 
that it does not necessarily cash flow, that is fine with me, 
because we subsidize a lot of things.
    However, this is a little different. Certified annual 
financial reports, quarterly operating expenses and revenues, 
things that any other entity, Fannie Mae or Freddie Mac--that 
is a bad example because Fannie is kind of late right now on 
theirs. But my point is at least there is requirements; and all 
I am suggesting, Madam Chair, is if we can come to a standard 
for reporting and understand the scope of our liabilities, it 
will help the Congress plan and I think encourage Amtrak to 
make the proper decisions subject to----
    Ms. Brown of Florida. Perhaps we will let them answer that 
question, because they had discussed it earlier. Why don't we 
just give you a moment to answer.
    Mr. Kummant. We produce monthly performance reports that 
are sent to the Hill and are posted on our Web site. Can every 
financial system be better? Yes, and we certainly are beginning 
a process to put the entire company on an SAP enterprise system 
and again have brought in a new CFO, a new CIO. But there is 
plenty of financial information available, as well as on our 
route level.
    Mr. Laney. We also have annual independently audited 
financial statements available at any time to you.
    Mr. Baker. If I may, I am not disputing that there isn't a 
financial regime in place, Madam Chair. I am just saying the 
information we get does not address the concerns that I have 
raised. I have spent considerable time in past sessions in this 
endeavor, and I am confident new leadership now being at the 
table, that these gentlemen are very capable and sincere of 
achieving their goals, but the fact that we are just now 
engaging in implementation of SAP is an indication we have 
still got work to accomplish. Not being combative, just we are 
not where we need to be, and I think that should be 
acknowledged.
    Ms. Brown of Florida. Thank you, Mr. Baker. I wasn't being 
combative, also. I just want you to know that I am pushing them 
because the people in your area have been pushing me.
    We are going to do our last round of questioning and start 
with my colleague from Florida, Mr. Mica.
    Mr. Mica. Thank you again. Just a couple of quick 
questions, if I may.
    Over the period I have been on the Committee you have had a 
high of, I think, in the 25,000 number of employees. What is 
the current number? I see a nod there. Then it went down to 
about 19,000. Where are you now?
    Mr. Kummant. We are about 18,5. A large piece of that was 
the Boston commuter service that dropped out, and the rest has 
been a gradual attrition and management efficiency work.
    Mr. Mica. Okay. So about 18,500. Your operating subsidy, 
last year I think Congress gave you about 1.2 and what was----
    Mr. Kummant. Excuse me, do you mean the total number or 
actual operating support number?
    Mr. Mica. Total number.
    Mr. Kummant. The number for--I will have to look over my 
shoulder. For 2006, it was the 1.295.
    Mr. Mica. But that wasn't all operating subsidy, was it?
    Mr. Kummant. That included capital and debt service.
    Mr. Mica. What would you say the subsidy was? I have 
between 500 and 600 million.
    Mr. Kummant. It ended up being about 450 and the debt 
service----
    Mr. Mica. That makes the average subsidization of a ticket 
based on your ridership about $49 for every ticket?
    Mr. Kummant. I would have to do the math, dividing that by 
25 million riders.
    Mr. Mica. Well, it is too difficult. I think that is 
correct. I may be wrong. Your debt service was running around 
300 million.
    Mr. Kummant. A little over 300.
    Mr. Mica. About 300 million. And your capital--backlog 
maintenance, I am sorry, backlog maintenance at one time that 
was 4 to 5 billion. Is that still that high or has it been 
brought down?
    Mr. Kummant. Ongoing capital number has been between 4 and 
600 million. We have put 1.4 billion into the corridor.
    Mr. Mica. Okay, that is capital. What about your 
maintenance backlog for the whole system?
    Mr. Kummant. Basically, that essentially, as you pointed 
out earlier, is our system. So we pretty much have worked off 
the state of good repair types of issues to get to that point. 
The ongoing number to maintain state of good repair in the 
corridor will be about 350 million, and about 70 percent of the 
equipment has been refurbished.
    Mr. Mica. Not annualized but the total maintenance backlog 
would be?
    Mr. Kummant. The total maintenance backlog on the rest of 
the system is a freight railroad.
    Mr. Mica. You are not counting that.
    Mr. Kummant. No, sir.
    Mr. Mica. But to operate you are going to need 1.2 to 1.3 
billion budget per year, right?
    Mr. Kummant. In the range of 1.2 to 1.5.
    Mr. Mica. In the Lautenberg bill that was about 1.8 billion 
or something like that, that would give you about 4 to 500 
million a year extra, but that is not really going to bring you 
to a high-speed system based on any testimony we have ever had 
here.
    Mr. Kummant. No, sir. Again, we are talking about tens of 
billions for a radically different system.
    Mr. Mica. Last time we had someone testify it was 16 to 18 
billion, as I recall. But that has been years ago, too. I am 
not sure what that would have gotten you. Might have gotten 
some tunnels and bridges and all the other things, but I don't 
know if it would get you a full high-speed system. Because, as 
you testified earlier, you still have problems running it in 
the same corridor. It needs to be separated, right?
    Mr. Kummant. If you are looking for 300 kilometer an hour, 
200 plus mile hour system, you need a radically different 
system. There is no doubt.
    Mr. Mica. All right. One other thing that is in the--there 
are several measures, the environmental meltdown, the global 
warming. There is a proposal to have commuter rail and other 
passenger rail preempt freight as one of the measures that they 
are looking. Have you at all taken a position on anything like 
that, passenger service? In fact, I think you are still in 
charge of all passenger service.
    Mr. Kummant. Forgive me. Are you referring to the 
fundamental Amtrak right on host railroads?
    Mr. Mica. I think they are looking at beyond that in one of 
these proposals. Maybe you haven't seen it.
    Mr. Kummant. There are preemption discussions on local 
preemptions in the Northeast Corridor which we would be very 
concerned about very specific language on that. Because you end 
up have enormous system difficulties if any locality can 
preempt service on any kind of contiguous piece of the 
Corridor.
    Mr. Mica. In the Northeast Corridor you wouldn't favor 
that.
    Mr. Kummant. Because, again, you would probably destroy the 
value of actually having a corridor. It wouldn't become a 
corridor. It would become a local, fractured piece of locally 
controlled segments.
    Mr. Mica. But there are some proposals in Congress as part 
of the global warming initiatives and may be coming out of one 
of the Committees to do just that.
    Mr. Kummant. I am not intimately familiar with that.
    Mr. Mica. You wouldn't favor that?
    Mr. Kummant. In a general sense, and I may be misspeaking 
because I don't know the specific provisions, but if you split 
up until small, locally controlled pieces you will use the 
effectiveness of intercity passenger rail.
    Mr. Mica. Thank you. I appreciate the job you and Mr. Laney 
try to do. Thank you.
    Ms. Brown of Florida. Mr. Mica, have you finished? Thank 
you very much.
    I know that you know we spend close to $4 billion a week in 
Iraq for 28 million people. I would like to see what would a 
couple of extra billion dollars do if we put it into the system 
so we can move our citizens and get them to work and back and 
forth and free up some of the money that we put into the 
airports so that a lot of our aging population or elderly would 
love to be on the train as opposed to the plane and all that 
security the way they have it.
    Mr. Mica. If the gentlelady would yield. I would be happy 
to sign on to any legislation.
    We heard the request here that we need to draw private 
capital into the process. Private capital will flow into the 
process if they are allowed to develop and operate those 
corridors and you won't have to put--well, you have to put 
very, very little Federal money into it. We may require some 
Federal backing, maybe some exceptions like we do on some 
liability for airlines, and we will have high-speed corridors, 
rail passenger corridors throughout the United States.
    Ms. Brown of Florida. I am excited about that initiative, 
and I take back my time. I am just looking forward for them to 
come forward with the plans so we can figure out how we can 
assist.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Madam Chair.
    I am sitting here because I am listening to that, and I 
wish that we had all the money to be able to do those high-
speed intermobile and everything else to move our product to 
market and our people to work.
    One of the questions that comes to mind as you are talking 
is about the pay raises that have not happened since, what, 7, 
8 years. Is it something that happened that management recently 
is going to be giving raises and not staff? Doesn't that kind 
of go against the wage increases of $1.70 for labor for the 
last 7, 8 years or whatever?
    And then, aside from that, have you lost personnel because 
of it? And then what are you going to do in having to train new 
employees who have to come and backfill, if you will, to be 
able on to take on those jobs, the time and money spent on 
that, and then what does that do to your accident rate?
    Mr. Kummant. All very good questions.
    Let me address there is a program that we had put in play 
which was to address hard-to-fill jobs in the management ranks. 
Let me just put that in perspective.
    The price tag on this for the company was in the 5 to $6 
million range, in contrast to a $200 million back pay issue. 
The intent there was to focus very specifically on jobs that 
have remained open and frontline jobs that we simply haven't 
been able to fill in areas where our current pay was perhaps 25 
percent below local markets.
    I would also like to say that no one is well served, either 
management or labor, by not having jobs filled. I absolutely 
agree with that.
    Now that specific program we are going to take another look 
at, look at specific provisions. We had a geographic component 
that may have been a little too broad. It is actually a very 
modest program in contrast to some of the large issues relative 
to labor front, and it ended up being something like--I don't 
know--2 percent on the total salary. But, again, that program 
we are taking a look at and making sure that it is the right 
thing to do.
    I am not trying to pour the salt in anyone's wounds. I am 
trying to run an effective organization. That really was the 
thrust of that.
    To your other points, I simply say I agree with your 
concerns and worries. We do have difficulty filling jobs 
without having labor agreements. It does make training more 
difficult. So far, our safety numbers have held up. I agree 
that not having experienced people on the job sometimes can be 
a safety liability.
    But in the safety realm it is actually interesting, because 
it can cut both ways simply on how the numbers work. This is, 
believe me, not an argument to hire new people, but sometimes 
new people can actually be much more focused on safety than 
people on the job for a long time, not exclusively true, but 
that is why one can drive safety numbers effectively even when 
one has turnover.
    But there is a training cost, training liability, and that 
we need to fill jobs is absolutely true, and that is a problem.
    Mrs. Napolitano. But isn't it true that experienced people 
are necessary to be able to prevent accidents?
    Mr. Kummant. Yes, I agree completely. I only meant in some 
cases you can have fairly new workforces and see good safety 
numbers and you kind of wonder how can that be. That is not to 
say experienced workforce and sustaining it is not where it is 
at. I absolutely agree with that. No question.
    Mrs. Napolitano. Then one other area that is rather 
interesting is that you apparently have 70 percent of your 
rolling stock has been refurbished, but most of it is over 25 
years old. When and how and what plan have you got to be able 
to replace, modernize and be able to expand to be able to 
increase your ridership?
    Mr. Kummant. You are absolutely again right. That is really 
the centerpiece of where we believe we have to go forward 
strategically. We have to begin a whole new cycle of equipment 
procurement, even this year, even for our high-speed product.
    Mrs. Napolitano. Is that part of what you are presenting to 
Congress at all? Because if it is not being considered, how are 
we going to look at it?
    Mr. Kummant. This is part of the document we will be 
producing shortly. But, in all candor, it is something we have 
talk about at almost every hearing in terms of a very 
significant need for the system.
    We would also love to look for some demonstration train 
sets of modern equipment to show what that can do for ridership 
as well. We may be able to do some of that more quickly rather 
than major other procurement. But you are exactly right, and 
that is a key issue to focus on in the coming year.
    Mrs. Napolitano. I hope that Amtrak will move forward on 
trying to get this imminence of strike avoided.
    Thank you, ma'am.
    Ms. Brown of Florida. Thank you.
    Mr. Shuster.
    Mr. Shuster. Thank you.
    First, I just want to make a statement. I am very 
encouraged to see in your plan that you are going to use the 
Customer Service Index as one of your metrics as you go 
forward. I think in any business making sure customers are 
satisfied is the number one job. So I am pleased to see that.
    Also very pleased to see that you are, in your procurement 
for equipment in the future, to purchase DMUs, lower cost to 
operate and flexibility; and I am very interested in finding 
out if you are considering using them on the Harrisburg to 
Pittsburgh. There is about 70 to 75,000 boardings in that 
region. That is what I consider--I am sure you consider--lower 
volumes. Where are you looking at using them and can you 
generally comment has there been any discussion of the 
Harrisburg to Pittsburgh?
    Mr. Kummant. I am afraid I can't specifically comment on 
that, but that is exactly the type of service we look at in a 
development in a less dense area. I think along the gulf coast 
might also be an interesting area for DMUs and anyplace where 
we would like to build ridership. I think we are also looking 
at it in the Northeast.
    Mr. Shuster. I just think there are tremendous 
opportunities to build ridership.
    The final question I have deals with the food and beverage 
department. I know in 2006 the GAO had a study out there that, 
for every $2 in expense, you had brought in $1 of revenue; and 
in a time period from 2002 to 2004 Amtrak lost almost $250 
million, basically, selling ham sandwiches and chips. What 
reforms have you instituted and is it possible to get the last 
quarter profit and loss on the food and beverage department, 
see what you have done?
    Mr. Kummant. What I can tell you is this year we will 
continue improving that number. I think between 16 and $19 
million cost takeout.
    Let me also make the point, though, that you can go back 
and look at Santa Fe numbers from the 1950s and look at their 
food numbers. There simply is no way you are ever going to make 
money on food on trains. It is essentially part of what every 
seat pays for.
    So I do think we have to look at Amtrak in aggregate; and 
if you look Amtrak's fare box recovery overall we, in fact, 
stack up with anybody in the world, including the French, 
including the Germans. Our total fare box recovery of 70 
percent is a very good number and is in fact twice what 
transits run at, and that includes the entire food service.
    Now as far as the specific initiative, we do have 
areconfiguration of our dinners into a diner-lounge structure 
with a simplified menu, with a simply food and more flexible 
service that can be scaled up or scaled down depending on the 
service. That is really going to be our vehicle for efficiency 
and saving in the future, and I think we feel very good about 
that initiative.
    Mr. Shuster. In the last quarter, can you give me numbers?
    Mr. Kummant. I can give you the annual number, a savings of 
in excess of $16 million this year.
    Mr. Shuster. Again, thank you both for being here today. I 
appreciate your time, and I yield back.
    Ms. Brown of Florida. Thank you.
    My last question, I know I had a discussion, but I didn't 
get an answer, so let me just ask it in the form of a question. 
What is Amtrak's plans for the Sunset Limited route and when 
will those plans be finalized?
    I know that you all was in a board meeting when I tried to 
call you, Mr. Chairman, on this issue, because my office had 
been full of people from that region that came and talked with 
me about it. So I would like some discussion on that.
    Also, I can just fold in my other question, what is the 
largest challenges facing Amtrak; and, lastly, how can we in 
Congress assist you? If both of you could address those issues, 
I would appreciate it.
    Mr. Kummant. I would like to start with the Sunset. I do 
think what we would very much like to do, and it is in 
consultation with your office, is to focus on corridors along 
the same route in order to offer services that really work. I 
would, frankly, like to reduce or I should say eliminate the 
Sunset as this lightning rod for the--as an avenue of 
criticism. I think there is better and more effective service 
that we can offer your constituents and constituents along the 
whole gulf coast from Mobile to New Orleans as well as we 
discussed very specific corridors within Florida. And we also 
have different approaches on the western route in order to 
service that area and sustain the slot.
    So that is really how we want to move forward.
    The biggest challenges, again, I think we have addressed 
here today, which is, look, I will be the first to say we 
really want to come to a settlement with our whole workforce 
and our labor force. We want to be one team, move forward and 
really make this thing run.
    I do think the equipment procurement piece that we have 
talked about is substantial, and I think there again it is 
process, and it is capital, and there is, obviously, a lot of 
people committed to that.
    Finally, you have heard about the on-time performance 
challenges, and that is not an easy one. I think we are moving 
forward; and we do have a plan to continue working with the 
railroads, freight railroads. It is a personal view. But we are 
going to have to continue to find ways to put public capital 
into the real constraints in the freight network where both 
freight and passenger rail can get some benefit and drive on-
time performance.
    Thanks for the time today.
    Mr. Laney. With respect to the Sunset Limited, Madam 
Chairman, part of our challenge, as you know and you have heard 
us talk about it, is restructure, rationalization of our 
resources and investment within the long-distance structure.
    I think you just heard from our President probably what is 
likely to be the ultimate sense of the Board in relatively 
short order; and that is, those resources, that investment is 
not best served in the Sunset Limited. It is best served in 
focusing it on corridors and, in particular, in that part of 
the country in the concentrated populated area of Florida.
    Our biggest challenges are I think fairly easily 
identifiable: on-time performance, equipment replacement, the 
Federal-State match and the implications that has for corridor 
growth, our labor contracts. And not in that order.
    Ms. Brown of Florida. How can we help?
    Mr. Laney. The starting point is reauthorization. It is 
vitally important that we have some form of Federal-State match 
that is enough of an invitation to bring the States to the 
table to work with us for the corridor development. That is, I 
think, first and foremost in terms of what you can do. We will 
be delighted to help in any way we can, but our primary care is 
to continuing the progress that I think we have sustained for a 
number of years by working with you, with DOT, with the FRA, 
good partners, with the States, and continue the progress and 
the growth of ridership and revenue and the containment of the 
costs.
    Ms. Brown of Florida. Well, we certainly want to work with 
you. My challenge is that it is very important that I 
understand the operations side, that is one side of it, but 
also we need to know long term what kind of investment that is 
separate from operation. But when we look at security, when we 
look at your stakeholders that we have to work with, whether it 
is bridges and tunnels, what we need is to make sure that we 
have a system 10 years from now or 15 years from now that is 
really moving America where we want it to go.
    When we look at gas prices at $3, $5--$5, people cannot 
afford it. So we realistically need to be together on a team to 
move this country where it needs to go. I think we have the 
vision and the leadership in Congress, and working with you all 
on the Board, we can move forward, but we cannot do it in a 
vacuum. We need the input from you all.
    Mr. Laney. We fully understand and agree and look forward 
to working with you, Madam Chairman.
    Ms. Brown of Florida. Thank you.
    I want to thank the witnesses for their testimony and the 
Members for their questions.
    Again, the Members of this Subcommittee may have additional 
questions for the witnesses; and we will ask you to respond to 
those in writing. The hearing record will be open for 14 days 
for Members wishing to make additional statements or to ask 
further questions.
    Unless there is further business, the Subcommittee stands 
adjourned. Thank you all very much.
    [Whereupon, at 4:35 p.m., the Subcommittee was adjourned.]

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